October 23, 2006
Armonk, New York-based IBM has reportedly filed two seperate patent infringement lawsuits
against Internet giant Amazon.com. IBM said today the suit is for unspecified damages.
IBM's lawsuits cover five patents that it alleges Amazon has knowingly infringed upon. IBM said the
online retailer uses its customer recommendation and purchase system, advertising, web site navigation and
the way its stores data on its network.
IBM said it has notified Amazon.com more than a dozen times of the alleged infringement since over two
years ago seeking reimbursement, but the companies have not been able to find any acceptable agreement
on that issue.
The company added that other IT firms license these same patents, and that it is open to licensing and
sharing its intellectual property.
The two lawsuits were filed in two federal District Courts for the Eastern District of Texas: one in the
Tyler Division and the other in the Lufkin Division.
Overall, Texas has attracted many intellectual property disputes recently because lawyers believe some
districts are sympathetic to the charges.
"We filed this case for a very simple reason: IBM's property is being knowingly and unfairly exploited," said
Dr. John E. Kelly, senior vice president of IBM Technology and Intellectual Property, in a statement.
"Any technology IBM develops is premised on the fundamental principle that IBM's intellectual property
is one of our core assets. At the same time, this represents the work product of tens of thousands of
scientists and engineers and billions of dollars in investments," he added.
Amazon was not available for comment this morning. An industry analyst said today that the lawsuit could
just as easily end in an out-of-court agreement as a damages award.
Robert Toomey, an analyst with E.K. Riley Advisors who covers Amazon said this morning "My feeling is that
they will ultimately reach some kind of agreement with IBM".
"Amazon would certainly like to avoid a court outcome if it can help it. Overall, patent lawsuits are well
known to drag on in courts for many years."
IBM is America's largest computer services company, with $91.1 billion in revenue last year.
IBM invests about $6 billion a year on research and development, and has had more U.S. patents than
any other company in the world for each of the past 13 years.
Seperately, Universal Music Group said last week it filed lawsuits against online video sharing
sites Grouper and Bolt.com for allowing users to swap pirated versions of its musicians' videos.
Source: CNN Money
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